INTEGRA MINING LIMITED Audio Webcast

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INTEGRA MINING LIMITED (IGR)

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INTEGRA MINING LIMITED (IGR) Events

Company (Stock Code)	Date/Time	Event	Timezone: Australia/NSW
INTEGRA MINING LIMITED (IGR)	Thu, 4 Dec 2008 03:30PM	IGR - Discovery of High-Grade Primary Gold Mineralisation - Mr Chris Cairns, Managing Director
INTEGRA MINING LIMITED (IGR)	Mon, 10 Nov 2008 03:30PM	IGR - Annual General Meeting - Mr Chris Cairns, Managing Director
INTEGRA MINING LIMITED (IGR)	Tue, 7 Oct 2008 01:00PM	IGR - Resources Rising Stars - Mr Chris Cairns, MD
INTEGRA MINING LIMITED (IGR)	Tue, 16 Sep 2008 01:30PM	IGR - Excellence in Mining and Exploration Presentation - Mr Chris Cairns, MD
INTEGRA MINING LIMITED (IGR)	Mon, 7 Jul 2008 04:00PM	IGR - Resources Rising Stars Shareholder Update - Mr Chris Cairns, MD
INTEGRA MINING LIMITED (IGR)	Wed, 9 Apr 2008 11:30AM	IGR - 2008 Paydirt Gold Conference Presentation - Mr Chris Cairns, MD
INTEGRA MINING LIMITED (IGR)	Tue, 22 May 2007 01:00PM	IGR - 2007 Paydirt Gold Conference Presentation - Mr Chris Cairns, MD
INTEGRA MINING LIMITED (IGR)	Tue, 13 Jun 2006 02:30PM	AMEC Company Presentation - Mr Chris Cairns, Managing Director
INTEGRA MINING LIMITED (IGR)	Wed, 4 Mar 2009 11:00PM	Interim Results
INTEGRA MINING LIMITED (IGR)	Fri, 7 Nov 2008 12:00PM 02:00AM Australia/WA	Annual General Meeting Citywest Function Centre, 45 Plaistowe Mews, West Perth, WA
INTEGRA MINING LIMITED (IGR)	Fri, 9 Nov 2007 09:00AM	Annual General Meeting City West Function Centre West Perth WA
INTEGRA MINING LIMITED (IGR)	Mon, 5 Mar 2007 11:00PM	Interim Results
INTEGRA MINING LIMITED (IGR)	Fri, 6 Oct 2006 10:00AM	Annual General Meeting The City West Function Centre, 45 Plaistowe Mews, City West Centre West Perth WA 6009
INTEGRA MINING LIMITED (IGR)	Mon, 28 Aug 2006	Full Year Results
INTEGRA MINING LIMITED (IGR)	Fri, 21 Apr 2006 10:00AM	EGM City West Function Centre West Perth WA 6005
INTEGRA MINING LIMITED (IGR)	Tue, 21 Mar 2006 09:00AM	EGM City West Function Centre West Perth WA 6005
INTEGRA MINING LIMITED (IGR)	Wed, 8 Mar 2006 11:00PM	Interim Results
INTEGRA MINING LIMITED (IGR)	Thu, 29 Sep 2005 10:00AM	Annual General Meeting
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INTEGRA MINING LIMITED (IGR)

Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.

PRESENTATION BY CHRIS CAIRNS, MANAGING DIRECTOR OF INTEGRA MINING LIMITED (IGR)

“Resources Rising Stars”

http://www.brr.com.au/event/51922

 

TUESDAY, OCTOBER 7, 2008, 2:00 PM.

 

            IGR      Thank you, Matt and thank you to Nicholas Read and Read Corporate for the opportunity to present to you today. Those movie cameras add on site, that

10                    was the Diggers and Dealers and in fact, that was the ABC doing a bit of a documentary on the mining industry and in fact, we’re also following Apex Minerals as I believe at the time. But certainly, I’d like to encourage any sort of media coverage that cast the mining industry in its real light as opposed to the light that most people see in terms of our environmental impact, which is

15                    in fact, actually, quite small.

 

                        So, just a little disclaimer, it’s on the website. It is recommended that you do read it. Everything we say, we believe to be true and to the extent that we can.

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                        So I just want to talk about Australian and Global Gold Trends for the moment. We are a gold company and gold only company, a traditional east of Kalgoorlie company, but the gold market is quite unique to other metals. This is Australia’s gold production, very interestingly, before the mid 70’s.

25                    Australia’s gold production was about 15 tonnes per year. With the advent of processing technology, carbon-in-pulp, CIP they call it, there was a huge technology shift and up until 1998, we then produced some 320 tonnes of gold per year. But it’s very interesting to note that since 1998, gold production in Australia has declined to the point where, now, we’re producing about 250

30                    tonnes per annum. Now, that’s despite the gold price increasing quite substantially since that time, and in fact, here are the major deposits as they were discovered through the history of Australia.

 

                        So, in major deposits, we’re talking about plus 100 tonnes of gold which is

35                    equivalent to about 3.5 million ounces of gold contained, and it’s worth noting that the very major deposits in the history of Australian gold production were actually discovered many years ago, some 30 odd years ago. So we’ve got the three largest deposits all discovered sort of prior to the very early 80’s, really with only one significant discovery since then. That is interesting in the

40                    context of Australian gold exploration expenditure because, prior to the later 70’s, there wasn’t much in the way of gold exploration expenditure. You can see two peaks in 1987 and 1997, and I suspect if we carried out the data to 2007, there would be another peak in that area. But what is particularly interesting is that the number of discoveries is not related to the intensive

45                    period of expenditure or rather that the rate of discovery has been decreasing such that there haven’t been any significant discoveries since 2005 and there was a bit of drought well and truly before then.

 

                        So here are the names of a number of these deposits. We know them well, Telfer, a very large deposit, Northern WA, Olympic Dam, Boddington, Cadia, and the most recent one in Far Eastern WA, Tropicana. But there has been a very significant decline in the success rate of exploration for gold, both in

5                      Australia and throughout the world. Such that global mine supply has been decreasing since 2001 and this trend is projected to continue quite significantly in the future.

 

                        So just a little quote from James Sokalsky, the Chief Financial Officer of

10                    Barrick Gold, these people do a lot of research into this and they are convinced that gold production will decrease 10% to 15% more than what forecasters are projecting. So we’re in a bit of a crisis in terms of gold supply and the headlines say it all, South Africa, Australia, Canada, USA, the four main producing countries all declining in production slightly offset by

15                    increases elsewhere in the world and particularly in China. But nonetheless, the net effect is that gold production is declining and there is nothing on the horizons to suggest that this going to change.

 

                        So in that context, I’d like to present to you, Integra Mining. As I say, we’re a

20                    classic Kalgoorlie gold story, emerging West Australian gold producer, and the defining attribute of the company is that we have got high grade. We’ve got a large resource inventory of 1.8 million ounces and average grade of 2.7 g. We’re only looking at open pit operations at the moment although we do have good potential for underground development, but we’re looking as per

25                    our pre-feasibility study that we’ve put out earlier this year and an open pit production grade of around 3.4 g, a low strip ratio, excellent metallurgical recoveries, and expect to have a very low cash cost of production of around A$500 per ounce. We also have a track record of discovery. We made the discovery at the Salt Creek prospect last year. We’ve been aggressively

30                    drilling that out since that time and it’s turned into a real cracker of the deposit. Additionally, we also own a process facility and we also have a 140-man mining camp. All the rooms have toilets and showers and it’s the full bottle.

 

35                    So just a bit of an overview and I’d really like just only the focus on our market capitalisation at the moment. Today, I believe our share price is 15 cents, so our market capitalisation to be just shy of $60 million. We have $11 million cash in the bank. We have hard assets and we have an enterprise value or the market capitalisation less cash and the value of hard assets of less than

40                    $15 million. Our share price has shown quite a rollercoaster sort of a ride and on the left hand side, we love it when the institutions come in and start buying on market, but when the institutions decide that they are going to vacate the room, they exit at a fairly rapid pace and it’s irregardless of what they think of the quality of the story. They have their own issues, redemptions, people

45                    pulling money out of their own funds and after reduce their positions. So we’ve seen that over the past three months. A lot of institutional players have been selling out of the stock and have pushed us down well beyond what we think is fair value for the stock.

 

                        So the project itself, as I say, on the inset map here, Kalgoorlie sitting here, Kambalda here. So these red outlines are our tenement position between 60 km and 120 km east of Kalgoorlie, along the Trans-Australian Railway. So this railway here runs all the way from Kalgoorlie to Adelaide. There’s a well

5                      formed drive next to its project, that’s just as excellent. We can drive that to the project in less than an hour from Kalgoorlie and in all of the services and all of those sorts of facilities, they are available to support the industry out of Kalgoorlie.

 

10                    Our resources base is very large. It’s high quality, well drilled, well defined, and high grade. The highlights of the asset base are the Maxwells deposits, 410,000 ounces at 5.2 g and the new discovery at Salt Creek with 4.6 tonnes at 2.7 g for 400,000 ounces. These two deposits are the underpinning of the pre-feasibility study that we completed this year and our focus of our

15                    development aspirations.

 

                        So as mentioned, those deposits are the key to what we’re proposing to develop. The Salt Creek deposit is... we’ll put the mill next to Salt Creek, just here. There’s an existing whole road that goes from Maxwells across to this

20                    area we’ll have to build another 2 km of road, it’s only 15 km away. These two deposits will provide lower volume material, but higher grade, about 5 g production grade going across to the mill here located next to Salt Creek. Salt Creek provides the bulk volume of our production.

 

25                    So, at Maxwells, the mineralisation is hosted in what we call banded iron formation. So these ribbon-like stringers here through the pit, there are multiple loads and they’re very high grade. So we’re looking on an open pit production grade from this deposit of about 4.9 g. It’s selective mining, but the orebodies are well known, well defined, and should produce very nicely.

30

                        Salt Creek discovery in this position here was what we discovered in May last year. It’s a blind discovery. So there’s no surface expression of the deposit and the discovery was product of some good geologic thinking and brought us into the area where there was no previous known gold mineralisation, no

35                    old timers working or any known anomalies. So within the tenement, the location in the map, part on the left hand side but on the right hand side, just not all of the results that we’ve had but are fair cross section of results and just some spectacular intercepts of significant width and very good gold grade and the bottom result, 10 m at a 137 g, is not a misprint, it actually included

40                    4 m at 328 g. So it’s just a fantastic deposit. It’s got good geometries, good metallurgy, and is perfectly suited to open pit mining.

 

                        So just a couple of cross sections, just to give you an idea of what the deposit looks like. It’s quite a significant blob of mineralisation in cross sections, so

45                    surface is up here. Surface is 300 m above sea level, so the RL numbers down the side here are metres above sea level. It’s a 200 m, RL is a 100 m below surface. All of the mineralisation on this section will go into an open pit quite comfortably. The drillholes are spaced naturally about 20 m apart. So you get a sense that across the dip of the page, it’s about 80 m to 100 m wide and probably 30 m to 45 m thick.

 

                        So just a couple of sections, these are sequential sections so you know, just

5                      stepping by 20 m or 40 m at a time, just some nice thick hits, very, very consistent, very well behaved for a gold deposit. This is the resource block model looking now on long-sections. So we’re looking from a long one end to the other and the important point here is that 97% of these resources sit above 150 m depth, so again, just beautifully amenable to open pit mining.

10

                        We own a process plant. It’s the New Celebration Plant formally owned by Harmony Mining. This site is now clear. We’ve dismantled the plant. The major components are sitting in Kalgoorlie in the yard of our engineers, ready for refurbishment. All the structural steel and conveyors and agitators, etc.,

15                    etc., are all sitting out on-site in the lay-down area all ready for refurbishment and reinstallation. So we bought this plant about two years ago for $3 million. It costs us $3.5 million to dismantle it, remove it from the site. The replacement cost is somewhere in the order of $20 million to $25 million, and the waiting time for a ball mill is anywhere between sort of 54 to 72 weeks.

20                    So we don’t have any of those problems, we own it.

 

                        So the Base Case development proposition, we’re looking at the process plant located to Salt Creek deposit. A throughput of 1.1 million tonnes per annum, the ore resource from Salt Creek primarily about 75% of the feed at a

25                    throughput grade of about 2.8 g, supplementary feeds sort of lower volume about 25% of material coming from Maxwell’s and Cock-eyed Bob deposits at about 4.9 g per tonne, just an outstanding diluted grade of about 3.4 g.

 

                        We have excellent recoveries plus 95% on a relatively coarse grind and about

30                    4 ½ years with the feed from these open pit sources but we have a number of other deposits that we’ve not included yet in the Base Case development proposition.

 

                        Cash cost, as I say, about $500 per ounce and we’re looking to start

35                    production in late 2009, early 2010. Project is very robust, it’s low risk, and it’s got excellent upside.

 

                        So just a few graph tabulations of the deposit specifics, see a low strip ratio there. There is a pre-strip on the Salt Creek deposit that once that strip is

40                    done we’re done to a strip ratio of 2 to 1 operationally on that deposit.

 

                        The revenue at $950 an ounce and today, in case you haven’t noticed, the gold price in the Aussie dollars is AU$1,154 this morning. So these numbers are a little bit out of date but very, very, very significant revenues. The internal

45                    rate of return of course at AU$1,150 is quite phenomenal. It’s not 41%, it would be north of 50% and these are the capital costs. The capital costs are fairly robust. We’re quite comfortable with those. The pre tax net profit was quoted at $129 million at AU$950 per ounce, and here is our grade relative to other open pit operations recently in WA. Now, I point out that nationally you can take the 1.5 g line across here as really being a proxy for what’s economic and what isn’t. Below that, these operations have all ceased production in recent times. Bronzewing likewise had finished but it wasn’t the open pit that put them under, it was the underground, but our grade is very,

5                      very significantly higher than anything else going in WA at the moment for this scale.

 

                        Just to highlight point in terms of earnings and how it relates to the gold price. In this graph here, we have the gold price. Our pre-feasibility study done at

10                    AU$950 here and this is the $129 million after capital, whereas go to $1,150 here, you can see that it’s actually $225 million worth of profit after capital. So very, very robust project and very, very highly geared to the gold price.

 

                        So where to from here?  As mentioned, we have ten additional open pit

15                    optimizations on other deposits not included in our Base Case feasibility study and we’re looking to bring some additional pits into that study. We have excellent potential for additional discovery, the Salt Creek discovery, because it was a grassroots discovery in an area where there’s not previously any known gold mineralisation gives us a great opportunity to find additional

20                    deposits within much larger gold system. So we’ve identified an 8 km corridor between Salt Creek and another prospect to the south called Lucky Bay, and we’re pursuing that at the moment. So we’re looking to add to the Base Case and any additions don’t have to carry any of the capital, that’s already spoken for and the profit from those discoveries would report directly to the bottom

25                    line.

 

                        So this is the 8-km trend within our tenements going from Lucky Bay in the south all the way up to the north here. At the moment, we’re currently drilling at Lucky Bay itself. The rigs there, as we speak, very nice deposit, not yet in

30                    resources, and certainly with a lot of opportunity yet there’s a number of prospects in between Lucky Bay and Salt Creek that we’re just starting to bring through now and you’ll be hearing more about those.

 

                        So Lucky Bay, just as an example, not in resources but from very, very

35                    shallow depth, some very attractive hits, half-ounce Intercepts 21 m at 15 g from 17 m depth. The rigs down there now and we’re also testing this very large anomaly, Lucky Bay north here. Gold, arsenic, copper, lead, zinc anomaly, looking very good, so we’ll get some drill results from that very shortly too.

40

                        We do have a track record of resources growth. Since 2004 or prior to August 2004, Integra had no resources that we could report in compliance with the JORC code and we now have 1.8 million ounces and certainly we expect to continue the trend of resources growth that we’ve established.

45

                        So the investment summary is that we have a dominant 10-year position east of Kalgoorlie. We have a very, very, strong resources base at a high grade of 2.7 g. And really grade is the defining attribute of the company with an expected open pit grade of 3.4 g, which is far and away beyond what appears we’re producing at. It’s a quality, low-risk development proposition, open pit, high grade, good recoveries, and close to Kalgoorlie and we do have a track record of discovery in resources growth. The upside is that we have very prospective land position, that 8-km gold trend is going to be assessed

5                      aggressively over the coming months. We are using leading-edge technology as opposed to bleeding edge, so it’s technology that works, and our exploration team has a fantastic track record. We’re looking for the sorts of returns that can only come from discoveries.

 

10                    I’ll just leave you with a quote from Tye Burt, the CEO of Kinross Gold at the Denver Gold Forum last month, and I concur entirely with everything that he said in this statement.

 

                        Thank you very much.

 

PRESENTATION CONCLUDED

 

 

 

 

Contact brr@brr.com.au for more information

 

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